Proposed Tariffs Threaten Biomedical And Generic Pharmaceutical Industries; What You Can Do To Protect Your Interests?

Posted by on Apr 19, 2018 in International Trade |

By: Henry T. Chou, Esq.

In early April 2018, the Trump administration announced that it would place a 25% tariff on more than 1,300 products imported from China that include items used in the robotics, information technology, communication technology and aerospace industries. What is not widely known, however, is the fact that dozens of drugs and medical devices are among the Chinese products and ingredients that the Trump administration targeted for the 25% tariff.  Under the administration’s proposal, defibrillators, pacemakers, artificial joints, dental fillings, birth-control pills, vaccines, insulin, epinephrine and lidocaine are among the many items targeted by the tariff.

The U.S. medical device industry has expressed concern because many of its member companies own and operate factories in China that manufacture products that are sold in the U.S.  Manufacturing activities in China have boomed in recent years, resulting in a situation where 12% of all medical devices imported into the U.S., worth $3 billion per year, are made in China.  Analysts have estimated that the proposed tariff could cost the U.S. medical device industry up to $1.5 billion each year, with the increased costs ultimately being passed down to consumers.

The generic pharmaceutical industry is also bracing for the effects of the tariff, given that China is a leading exporter of raw pharmaceutical ingredients.  Of particular concern are generic injectable drugs, which are already in short supply due to existing manufacturing and supply issues.  Two drugs on the list of Chinese exports subject to the proposed tariff are epinephrine and lidocaine, both of which are in short supply in their sterile injectable form.  Additionally, since the raw ingredients for generic injectable drugs made in the U.S. are mostly sourced from abroad, the full extent of the tariff’s impacts may not be known for some time.

The list of items subject to the proposed tariff can be viewed at  There is still time to act if a product that you import appears on this list, as companies have until May 22 to submit comments to the administration regarding the tariff.  Hill Wallack LLP stands ready to assist its clients in minimizing the effects of the proposed tariff.

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Posted by on Jan 11, 2017 in Direct Investment from China, Dispute Resolution |

An India-based pharmaceutical company, Dishman Pharmaceuticals and Chemicals, Inc. (“Dishman”), won a significant victory on December 29, 2016, when the Appellate Division of the New Jersey Superior Court held that Dishman could not be sued in state court even though one of its subsidiaries, Dishman USA, Inc., is located in New Jersey.

The litigation arose from the failed sale of a Chinese manufacturing facility owned by a Dishman subsidiary in China to FDASmart, Inc., a New York-based company. The Memorandum of Understanding (“MOU”) between Dishman and FDASmart provided that FDASmart would be paid certain consulting fees in connection with the transaction. It also stated that the deal was to governed by the laws of India, a non-disclosure agreement was to be signed in India, and fees were to be paid with applicable Indian taxes. When the deal fell through, FDASmart filed suit against Dishman and Dishman USA in the Law Division of the New Jersey Superior Court, alleging Dishman breached the MOU by failing to pay consulting fees to FDASmart.

After the Law Division initially found that it had general jurisdiction over the dispute due to the presence of Dishman’s subsidiary in New Jersey, the Appellate Division reversed, holding that Dishman lacked “continuous and systematic contacts” with New Jersey to justify it being “haled” into its courts. The Appellate Division refused to assert jurisdiction based solely on the technicality of ownership of the subsidiary by the parent company and held that FDASmart needed to demonstrate the “dominance” of Dishman USA by Dishman via other factors such as “common ownership, financial dependency, interference with a subsidiary’s selection of personnel, disregard of corporate formalities, and control over a subsidiary’s marketing and operational policies.” Since the evidence in the record showed Dishman USA operated independently of and was not financially dependent on Dishman, the Appellate Division determined that the New Jersey courts lacked general jurisdiction over Dishman and dismissed it as a defendant.

While this decision is generally favorable to foreign pharmaceutical companies with subsidiaries in New Jersey, it is a fact-specific outcome that may not be repeated in situations where parent-subsidiary operations are intertwined and subsidiaries are dependent on parent companies for decision-making and financial matters. Careful analysis and restructuring may be required to operate within the confines of the court’s decision and avoid imputation of liabilities upon the parent company.

Hill Wallack LLP represents over 20 companies in the life sciences sector, including biotechnology, therapeutic, diagnostic, pharmaceutical, biopharmaceutical, biomedical and biosynthesis companies. The firm assists these clients in connection with intellectual property, technology transfer, university spin-outs, venture capital and finance, employment, regulatory and mergers and acquisition issues.

This article is for informational purposes only and does not constitute legal advice or a legal opinion.

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Posted by on May 31, 2016 in Direct Investment from China |

根据有关报道,中国2015年在美国的直接投资年达到150亿美元。根据2016年目前的情况,这个数字可能在2016年被刷新。美中关系全国委员会(National Committee on U.S.-China Relations)和Rhodium Group 4月12日最新发布的信息称,中国2016在美国的直接投资预计将达到300亿美元。

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新泽西连锁经营法“Franchise Practices Act”对连锁经营合同的适用

Posted by on Nov 17, 2015 in Direct Investment from China |


很多个人和公司都想加盟连锁经营店,例如McDonald’s, Subway, Panda Express, Kung Fu Tea等等。新闻中也时常介绍我们华人加盟这些连锁经营店不失为谋生创业的一个好途径。最近,我有机会代理和帮助几个客户加盟不同的连锁品牌,希望在此和广大读者分享新泽西Franchise Practices Act保护加盟者的主要内容,以及对连锁经营合同的影响。










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Hill Wallack Attorneys Attend Conference on RMB Internationalization

Posted by on Nov 3, 2015 in Uncategorized |

On October 8, 2015, Hill Wallack attorneys, Eric Abraham, Henry Chou and Kun Zhao, attended the “Conference on RMB Internalization, Opportunities and Challenges” at the Midtown Hilton in New York. See

Hill Wallack was a co-sponsor of the event, which was attended by representatives of well-known international organizations, financial institutions, universities, think tanks and corporations. Our attorneys attended the conference and exchanged opinions with the panelists and attendees regarding RMB internationalization specifically their practical experience with the internalization of RMB by way of FDI in the U.S. The event was covered by members of the U.S. and Chinese media.

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